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China-Angola Investment Model

Liviu Stelian Begu (), Maria Denisa Vasilescu (), Larisa Stanila () and Roxana Clodnitchi ()
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Liviu Stelian Begu: Faculty of Economic Cybernetics, Statistics and Informatics, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Maria Denisa Vasilescu: Faculty of Economic Cybernetics, Statistics and Informatics, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Larisa Stanila: The National Scientific Research Institute for Labour and Social Protection, 010643 Bucharest, Romania
Roxana Clodnitchi: The Faculty for Business Administration in Foreign Languages, The Bucharest University of Economic Studies, 010374 Bucharest, Romania

Sustainability, 2018, vol. 10, issue 8, 1-17

Abstract: In the aftermath of Angola’s civil war, strong economic relations developed between the country and the People’s Republic of China. Our study addresses China’s investment risks in Angola, considering an infrastructure-for-petroleum partnership between these two countries. The main working hypothesis is that the recovery of Chinese investments made in Angola is has translated into thousands of barrels of petroleum being imported daily from Angola. We analyzed the main economic, social, and political indicators that describe the situation in Angola that could impact the recovery of Chinese loans in the form of oil exports. Data processing implied involved regression-based imputation, MinMax data normalization, the use of the Analytical Hierarchy Process (AHP), and econometric analysis, next to the construction of a composite risk indicator. The results of the econometric analysis highlighted that an increase in the composite risk indicator of 1% leads to a decrease in the quantity of petroleum exported by almost 6377 barrels per day. Because, at least in the short run, the economic diversification in Angola is weak, and the most important asset is its oil, the partnership with China will continue to exist. This cooperation model represents a source of economic growth and infrastructure development for Angola and a source of energy that fuels China—one of the most powerful economies in the world.

Keywords: Angola; PRC; China; investment risk; risk; Africa (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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